Six major banks have agreed to pay $86.4 million to settle claims that they conspired to rig prices in the market for Mexican government bonds, a preliminary deal filed in Manhattan federal court that would close out eight years of litigation. Bank of America, BBVA, Banco Santander, Citigroup, Deutsche Bank, and HSBC each agreed to have their Mexican banking affiliates contribute to the payout, while denying any wrongdoing as part of the settlement.
The preliminary settlement, filed in Manhattan federal court late Friday, would resolve all remaining claims in the case, according to court filings cited by Reuters. The lawsuit accused the banks of conspiring to fix prices and allocations of Mexican government bonds, with investors led by several pension funds alleging the banks suppressed prices on bonds they bought while inflating prices on bonds they sold. It is part of more than a decade of litigation in Manhattan alleging major banks colluded to rig interest rates, U.S. Treasuries, other bonds, currencies, and commodities, the news service reports.
The case, formally known as *In re Mexican Government Bonds Antitrust Litigation*, was filed in March 2018 in the U.S. District Court for the Southern District of New York under docket number 1:18-cv-02830, with U.S. District Judge J. Paul Oetken presiding, according to court documents reviewed by VitalLaw. Pension funds had initiated the lawsuit following Mexican regulatory probes into bond market manipulation. The lead plaintiffs include the Southeastern Pennsylvania Transportation Authority, the Boston Retirement System, and the Oklahoma Firefighters Pension and Retirement System and Oklahoma Police Pension and Retirement System, according to court filings identified by Bleichmar Fonti & Auld.
Years-Long Fight Over Alleged Chatroom Collusion
Investors alleged the conspiracy ran from January 1, 2006, to April 19, 2017, with the alleged rigging carried out through direct agreements to alter resale prices in secondary bond markets. Chatroom transcripts were cited as evidence by the investors, per Reuters, and the financial instruments at the center of the claims include peso-denominated CETES treasury certificates, floating-rate Bondes D, inflation-linked UDIBONOS, and fixed-rate BONOS issued by the Mexican government, per the case's settlement administrator.
The path to settlement got a boost in January 2025, when Judge Oetken denied the remaining banks' motion to dismiss, ruling that allegations of direct agreements to alter resale prices adequately established an illegal price-fixing conspiracy under the Sherman Antitrust Act, according to the same VitalLaw account. The court rejected the banks' argument that investment contracts permitted secondary-market bid-ask coordination, clearing the way toward the settlement talks that produced Friday's filing.
Earlier Settlements Set the Stage
Barclays and JPMorgan Chase had already settled their portions of the claims for a combined $20.7 million in 2020, split between a $15 million JPMorgan payment and $5.7 million from Barclays. Those so-called ice-breaker agreements required both banks to hand over internal transaction documents and cooperate with plaintiffs, giving them leverage in building their case against the remaining defendants, according to Financial Recovery Technologies. In April, Judge Oetken approved distribution of that earlier $20.7 million settlement pool to verified class members, with payouts to investors who transacted bonds between January 1, 2006, and April 19, 2017, beginning in May.
Combined with the newly announced deal, the total payout across the litigation now reaches $107.1 million before legal fees, per Reuters. Investors' lawyers may seek up to one-third of the payout, or as much as $28.8 million, in fees, the news service reports. Lowey Dannenberg, P.C. serves as court-appointed sole lead counsel for the plaintiff class, a firm that previously served as co-lead counsel in the GSE Bonds litigation that recovered $386.5 million, according to the firm's own attorney biography pages.
Mexico's Regulator Took a Different Path
While the U.S. civil case produced a nine-figure recovery, Mexico's own antitrust watchdog moved on a far smaller scale years earlier. In January 2021, Mexico's Federal Economic Competition Commission, known as COFECE, fined seven major banks a combined 29.4 million to 35 million Mexican pesos, or roughly $1.7 million to $1.9 million USD, after a four-year investigation uncovered 142 illegal price-rigging agreements between 2010 and 2013, according to Mexico Business News. COFECE's investigation found that traders had used private messaging platforms to coordinate market positions.
Deutsche Bank and Barclays received the largest individual penalties from COFECE, assessed at 8.7 million pesos, or about $430,000 USD, and 6.35 million pesos, or roughly $315,900 USD, respectively, out of a maximum possible statutory penalty of 680 million pesos, according to The Business Times. Those fines amounted to only about 4% of the potential statutory maximum, the outlet noted.
The Mexican bond case is part of a broader, multi-decade wave of financial benchmark antitrust cases litigated in Manhattan federal court, targeting alleged manipulation across LIBOR, Euribor, Euroyen, Swiss Franc LIBOR, and European Government Bonds, according to Berman Tabacco. Those cases have collectively recovered billions of dollars for public pension funds and institutional asset managers over the years. The $86.4 million settlement still requires a judge's approval before it becomes final, and the banks involved have maintained their denial of any wrongdoing throughout the process.
